$1.8 million diminished earning capacity for non-working plaintiff.

On May 20, 2014, the BC Supreme Court addressed the difficult problem of assessing damages for a lifetime of disability for a plaintiff who has not yet entered the workforce.

In Hermanson v. Durkee, 2014 BCSC 877, the plaintiff was involved in a motor vehicle collision and suffered a severe traumatic brain injury which rendered him competitively unemployable. He was 18 at the time, had just graduated high school and had not entered the workforce. He “did not excel academically” and “it became apparently that post-secondary education was not likely or realistic“.

The court had to assess what the plaintiff’s lifetime earnings would have been had he not been injured in the acci. The Plaintiff argued that he would have likely worked in the trades in Alberta’s lucrative oil industry and had lifetime earnings between $2.8 and $3.3 million. The Defendant argued that his earnings would be more in line with the statistical average for high school graduates and suggested an earning capacity of just over $1 million.

Mr. Justice Betton found both positions were went “too far in their respective directions” and found a likely lifetime earning capacity of $1.8 million. In arriving at this figure the judge wrote:

[106] In my view, both positions go too far in their respective directions.

[107] It is my conclusion that Mr. Hermanson would have likely pursued a trade in the higher earnings spectrum of those that the economists have concluded he could have done pre-accident.

[108] In considering the evidence of the individual earnings levels as presented by witnesses for the plaintiff, significant caution must be exercised. Neither economist was asked specifically why they did not consider specific earnings levels of specific individuals, but in circumstances such as these, there is a strong argument to be made that statistics which, by necessity, blend high income earners, such as those presented by the plaintiff, with those who have not achieved such earnings is a more reasonable approach. Not all of the witnesses who were called had indicated that it was their intention to stay in their high earnings positions in Northern Alberta, and it seems logical that many, including possibly Mr. Hermanson had he gone to the oil industry at all, would feel the same. On the other hand, one must recognize that Mr. Hermanson is part of a social group, many of whom had elected, at least in their early years of employment, to pursue such jobs.

[109] In my view, such evidence is merely a consideration in assessing the value of the lost capital asset. There is certainly a substantial possibility that Mr. Hermanson would have, at least in the short term, pursued such work. It is difficult to measure the likelihood of that and even more difficult to determine how long he might have stayed in such a position.

[110] The defence argued that the plaintiff might have retired early like his mother. While that is a possibility, such a decision would logically flow from a relatively high earnings stream and/or prudent savings habits to enable such a decision. It is not reasonable for the defence to say that the plaintiff would have both been a low earner with limited motivation and retired early.

[111] In my view, the appropriate assessment of the plaintiff’s pre-injury earnings capacity is $1,800,000.

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